Sharp agrees to Foxconn offer

Sharp Corp has agreed to sell three of its overseas factories to Foxconn Technology Group (富士康科技集團) for about ￥55 billion (US$667 million), Sankei newspaper said, citing unnamed sources.

The television assembly plants are located in Mexico, Malaysia and Nanjing, China, and sale procedures will start as early as this month, Sankei reported.

Sharp said last month there was “material doubt” about its ability to survive after forecasting a record ￥450 billion, full-year loss on falling demand for its display panels.

Sharp, the maker of Aquos televisions, is selling assets and seeking investment as it cuts salaries and jobs, and offers voluntary retirements as a part of a turnaround plan.

In July, Sharp sold a stake in an LCD factory in Sakai, central Japan, to Foxconn, who will jointly operate the 10th-generation facility, the industry’s most advanced.

Sharp’s talks with Foxconn over a capital tie-up may continue beyond a March deadline, Sharp said last month. Earlier this year, the two reached a preliminary agreement on Foxconn buying a 9.9 percent stake in the Japanese electronics maker for ￥550 a share, or ￥67 billion.

SHARES PLUMMET

Negotiations on a final price have yet to be completed as Sharp’s market value declined almost 75 percent this year, to close yesterday at ￥172 per share.

Sharp president Takashi Okuda said on Nov. 1 that the company is considering various partnership options. Kyodo News said on Nov. 13 that Sharp was in final talks with Intel Corp to receive an investment of as much as ￥40 billion, while the Wall Street Journal said on Tuesday that the company is in talks with Dell Inc to arrange a capital investment of US$240 million.

Sharp hemorrhaged ￥103 billion in cash from operations in the first half of the year. The company may turn to the Japanese government for a bailout, analysts said last month.